China Northern Rare Earth High-Tech (600111) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 2024 was RMB 8.57 billion, up 1.54% year-over-year; YTD revenue was RMB 21.56 billion, down 13.5% year-over-year.

• Net profit attributable to shareholders in Q3 was RMB 360 million, up 10.94% year-over-year; YTD net profit was RMB 405 million, down 70.64% year-over-year.

• Main reason for profit decline was lower selling prices for key rare earth products, leading to reduced gross margin.

• Rare earth product sales volumes increased year-over-year, but average selling prices declined.

Financial highlights

• Q3 basic and diluted EPS were RMB 0.0995, up 10.94% year-over-year; YTD EPS was RMB 0.1121, down 70.64% year-over-year.

• Net cash flow from operating activities for the first nine months was RMB 1.53 billion, down 29.23% year-over-year.

• Total assets at quarter-end were RMB 41.91 billion, up 3.5% from year-end 2023.

• Shareholders' equity attributable to listed company shareholders was RMB 21.86 billion, up 1.12% from year-end 2023.

• Non-recurring gains for the first nine months totaled RMB 139 million, mainly from government subsidies and fair value gains.

Outlook and guidance

• Rare earth market remained weak in early 2024 due to lower-than-expected downstream demand, but prices rebounded in Q3.

• Praseodymium-neodymium prices stabilized in Q3 as downstream orders increased and new production quotas were issued.

• Demand for rare earth magnetic materials in new energy vehicles, air conditioners, and wind power showed rapid growth.